How do you draw up a household budget?

We will start by clearing up a misunderstanding: budgeting is not necessarily about economising and spending less. It is mainly about limiting or eliminating unnecessary expenses, so that you have more money left over for the things you consider important. In doing so, it is important to find a good balance between consuming and saving.

Do you know what you could possibly cut back on? We recommend that everyone does this exercise, especially when there are major changes in your life. Draw up your household budget and bring it to the structure and level needed to take action.

An overview of all your income and expenses

To know how much you can spend each month and how much you actually spend, it is necessary to first make an overview of your income and expenses. A household account book, in whatever form, gives you control over your budget. The way you keep track of your finances is not important:

• You can do this via apps that you can use on your PC, laptop, tablet, phablet or smartphone.
• The second option is to use Excel or another spreadsheet program in which you enter everything yourself or do so from your banking app. More and more people then put the spreadsheet in ‘the cloud’ so that all the family members involved can always access it.
• The third option is to do it ‘old-school’ with pen and paper or possibly in a cash book.

The way of budgeting that suits you best depends on your style and how you prefer to handle your money. First of all, look at the budgeting application of your own bank, because it will often be the easiest to use in combination with your bank transactions. If you are considering a general app, the following are regarded as the best: Money Lover, Spendee and Handwallet. There are also many other apps, such as ‘You Need A Budget’, in which you are encouraged to keep track of your budget continuously. ‘Goodbudget’ even works with virtual envelopes, in which you divide the available budget over different categories at the start of each month. PocketGuard builds a budget based on your spending habits, and the money you have left over you can ‘pocket’.

A good grouping of your expenses will open your eyes to how much you spend on certain things. You will find more explanation about this in our next blog post: ‘How do you group your income and expenses?’.

It takes time and effort to draw up a household budget and discipline to keep it up, but when you reap the financial rewards, you realise that it is more than worth it.

Get a budget coach on board to draw up and evaluate your budget together. Our coaches have been specially trained for this. Would you like to talk to an expert in budgeting? Then contact us, or create a first overview straight away with our budget planner.

Would you rather get started on your financial confidence and your financial well-being yourself? Then take a look at what our Academy has to offer. That way you will reach your savings goals faster and be able to realise your dreams and projects.